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Hewlett Packard Computer Systems organisation: Selling to Enterprise Customers.

Decent Essays

I.Introduction

In 1992, whereas Hewlett Packard (HP) realized a huge success with its RISC-based products, Manuel Diaz, head of HP's Computer Systems Organization (CSO), implemented a new sales approach to capitalise on the company's new market position. In 1994, the strategy turned out to be very profitable as HP's business grew by 40% when the industry-wide growth was just 5%.

In 1996, Diaz notices that its strategy to reach large enterprises could be refined. Indeed, HP remains stuck on the downstream and middle stream businesses of this market segment. At the same time, content value providers and solution-providers position themselves on the highly profitable upstream business. In parallel, Diaz looks for new ways of developing the …show more content…

Due to a decline in national (USA) spending and overcapacity CSO evolved into a global supplier of information appliances and solutions.

HP's core competency resided in the technological features of their products and a price/performance advantage in hardware supply. Additionally, the level of trust and confidence that IT customers placed on HP positioned their brand as a trusted hardware supplier.

B.Customers

CSO's customers are segmented into large (enterprise), small-medium (SME), and individual. Customers in the largest segment typically spent between $0.5m~ $200m of their annual multi-million IT budgets with HP. The top 5% of customers in this segment accounted for over 40% of CSO's sales. These customers frequently placed daily orders and consumed over 65% of sales force, which served them directly, total productive time.

Customers in the SME segment typically budgeted less than $0.25m for annual IT spending. A combination of sales reps and channel partners served this segment. Individual customers were serviced exclusively by indirect retail channels.

Considering the volume of sales generated by enterprise customers HP pondered the similarities and differences between the top enterprise customers in deciding whether to offer a standard product offering, customization, or an optimal mix designed to be able to benefit from cost reductions, stability, and improved profitability.

C.Order Qualifiers and Winners

Enterprise

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